The Challenge of Managing Returnable Assets
Returnable transport items (RTIs) are key elements for enabling a smooth flow of goods throughout supply chains. Despite their importance, RTIs can be prone to high loss and breakage rates.
Today’s RTI management processes are rather inefficient and are based on estimates about when, where and how RTIs are utilized. This limited visibility inevitably causes the involved parties to feel less responsible for the proper management of RTIs.
As a consequence, inefficiencies created by a single party can result in a significant cost burden for the whole supply chain.
Main wasteful practices that can cost companies millions of dollars a year:
- OEMs still employ manual methods in the entire process, and this leads to tracking errors and mishandling.
- Purchasing and carrying additional returnable assets than needed.
- Inaccurate billing for asset usage, storage or detention.
- Typically, OEMs order 10% to 15% more returnables than they actually need in order to account for loss and shrinkage over time.
- There are more containers than manufacturers need to run the production program.
- The cost of managing and handling these assets often exceeds many times over the asset investment value.
- The larger an RTI fleet grows, the more difficult it is to track.
- Many companies even see shrinkage rates between 3-20%.
- The leads to wasteful spending practices—having to buy new RTI’s to replace the lost ones and hire additional laborers to manage them.
The value of RFID for Returnable Transport Item Tracking Management
Returnable Transport Item Tracking using Smart Technologies The use of returnable containers (pallets, roll cages, returnable plastic containers, tote boxes, ingredients bins, dollies, IBCs, intermediate bulk containers, gas cylinders, and kegs etc) is an increasing phenomenon in the modern supply chain, with companies constantly seeking to reduce costs, increase handling efficiencies and improve environmental responsibility through less waste.
Increasingly stringent tractability regulation worldwide requires companies not only to provide a complete audit of product and ingredients movement in the supply chain but also compels them to track secondary packaging and materials handling equipment flows associated with product shipment.
In addition, the supply chain suffers significant costs annually, associated with the loss of equipment/assets and their subsequent replacement.
RFID tags on each individual unit make it possible to accurately and automatically track its movement, using fixed readers at strategic in-and-out portals at the distribution center or mobile devices (handheld, cell phones, tablets) readers for mobile read points at remote /customer facilities.
Benefits of implementing SmartX Hub Accountability:
SmartX HUB Platform for RTI and Reusable Assets builds on the TrackX GAME Platform to provide real-time visibility and control of RTIs and rental assets (e.g., oil/gas cylinders, beer kegs, IBC totes, horticulture racks, pallets, etc.) in a 3-tier (supplier, distributor, retailer) supply chain. It tracks shipping, returning, and receiving of inventory, validates inventory storage, manages processing of inventory (repair, maintain, clean, fill/load, etc.) for reuse at supplier, maintains viability of RTI content, and ensures accountability of supply chain partners.
- Visibility. An RFID container tracking solution automates the process by providing real-time visibility for tracking and managing reusable containers wherever they are located within your facility. Whether your business uses totes, bins or containers, a RFID container tracking system will improve productivity and reduce lost or stolen items – which leads to lower inventory carrying costs.
- Reduce counterfeiting. Pool players can improve their sales and their brand image (i.e. authentication of pallet quality) by gaining more visibility on the locations where counterfeited assets arrive in the supply chain.
- Adjust the pool size. With visibility on asset flow and asset stock at each location, pool players will have the opportunity to adjust their pool size with actual customer demands.
- Optimized exchanges with partners. With accurate visibility, companies can plan efficient collection of empties with their partners. They can also control both the quantity and authentication of assets being collected in order to balance their partner’s account and prevent recovery of lower quality, counterfeited pallets.
The standard RTI process supported by SMARTX HUB software includes the following steps:
- Tracking of returnable container current and historic locations, from supplier to customer and back again
- Commissioning and maintenance of RFID tags or bar codes placed on returnable assets using the standard global returnable asset identifier format
- Tracking of the asset through the various operations within the supplier’s facility, such as packing, loading, unpacking, and unloading
- Tracking of the asset through the various operations within the customer’s facility
- Automatic monitoring of events, such as empty and full status, using event management tools that alert relevant parties of unintended or unexpected events or changes in status
Efficiency SmartX Hub is able to accomplish your operational efficiency with the least waste of time and effort:
- Manage RTI pool shrinkage due to “stockpiling” in the distribution channel or at customer sites.
- RFID read point at “ownership” transitions in the supply chain.
- Account for damaged and lost RTI’s in financial budgeting.
- Increase availability of existing container supply by a proper allocation based on need/volume.
Implementing Smartx Hub® at your company, the high cost of old inventory management can be used to invest in your company growth since Smartx Hub® offers:
- Confirm cargo loads by quickly scanning RTI’s, reducing mistakes in shipments… much faster than barcodes!
- Reduce cost of leased RTI’s through more efficient inventory tracking.
- Reduce theft of high-value cargo by assigning responsibility… the customer knows the RTI is being tracked.
Effectiveness Smartx Hub® has the capability to provide your company with the desired Asset tracking results:
- Tagged RTI’s can facilitate regulatory compliance by tracking origination (i.e. fresh food products) and destination (particular store or DC) for an audit trail.
- Manage RTI cleaning schedules for regulatory compliance.
- Manage periodic maintenance requirements by cycling inventory back to factory/production plant